5.3.4.1. How Long Do Projects Have To Be Run?

The Kyoto Protocol requires that LULUCF projects result in long-term changes
in terrestrial carbon storage and CO2 concentrations in the atmosphere. The
definition of "long-term" varies substantially, however, and there is no consensus
regarding a minimum time frame for project duration.

During the AIJ Pilot Phase, projects have been conducted for a variety of time
frames: from 20 years [e.g., the PAP in Costa Rica (Trines, 1998a)] to 99 years
[e.g., the FACE Foundation projects (Verweij and Emmer, 1998)]. Most projects
state that their GHG benefits are expected to be maintained beyond the project
time frame [see the list of AIJ projects on the UNFCCC Web site (UNFCCC, 1999b)],
although their contractual arrangements are finite. This lack of definition
has caused uncertainty to all parties involved-from regulatory bodies to project
developers and investors.

There is a need, therefore, to agree on what time frame should be used as the
basis for quantification of GHG benefits of a project. Different time frames
or approaches have been proposed to define the duration of projects:

Perpetuity; Under this approach the environmental benefits of projects
must be maintained forever. This argument is based on the assumption that
the reversal of GHG benefits from a project at any point in time would totally
invalidate the project (Carbon Storage Trust, 1998; Maclaren, 1999) and that
only maintenance of carbon stocks in perpetuity could counter the environmental
effects of GHG emissions from fossil fuel sources. It is also argued that
this approach is the only one that is compatible with the stock change method
currently used by the IPCC for national GHG inventories (Houghton et al.,
1997). Criticisms of this approach argue that it is impossible to guarantee
that a project will be run in perpetuity; that maintenance of projects in
perpetuity may create conflicts with other land uses in the long term; and
that because of the decay pattern of GHGs in the atmosphere, there is no need
for mitigation effects to be perpetual

100 years: Under this approach, the GHG benefits of a project must
be maintained for a period of 100 years to be consistent with the Kyoto Protocol's
adoption of the IPCC's GWPs (Article 5.3) and the Protocol's 100-year reference
time frame (Addendum to the Protocol, Decision 2/CP.3, para. 3) for calculation
of the AGWP for CO2. Although this concept has limitations (IPCC, 1996), it
has been adopted for use in the Kyoto Protocol to account for total emissions
of GHGs on a CO2-equivalent basis.

Equivalence based: Under this approach, the GHG benefits of LULUCF
mitigation projects must be maintained until they counteract the effect of
an equivalent amount of GHGs emitted to the atmosphere, estimated on the basis
of the cumulative radiative forcing effect of a pulse emission of CO2 during
its residence in the atmosphere (i.e., its AGWP) (IPCC, 1992). Variations
of this concept have been developed that proposed minimum time frames of 55
years (Moura-Costa and Wilson, 2000) or 100 years (Fearnside et al.,
2000) (see Chapter 2).

Variable: This approach acknowledges that different projects may
have different operational time frames. Given the wide range of time frames
of projects carried out to date, it can be inferred that this approach has
been adopted during the AIJ Pilot Phase.

Adoption of a standard definition of the minimum required time frame for project
duration would greatly facilitate consistency in accounting for the GHG benefits
of different projects. It would also reduce the uncertainty of all parties involved
in project development (project developers, investors, certifiers, regulatory
bodies, and the general public).